Dear Subscribers,


Tomorrow after the market closes I'm off to Europe for 6 weeks. Again, if any European subscribers would like to meet up while I'm bouncing around, please shoot me an email. I wanted to make a few comments even though I will certainly be watching the markets and working while I'm traveling, but I do hope to disconnect a bit more than normal. Although, I really don't think of it as work...I love this stuff!


Zenyatta Ventures (ZEN/ZENYF) for those that are new subscribers, this has been a huge winner as our top pick from around 20 cents this time last year to $4 (20 bagger in less than a year). If you've followed my every move on this along the way, you would have been loaded to the gills at $2 quite recently and then sold 10% of your position this past week around $4. I sold on the first run over $4 and was filled around $4.10. Usually, you see stocks pull back after this big of a run when it's technically overbought hitting 86 on the Relative Strength Index. But, stocks can remain overbought (and oversold-see the gold miners) for awhile and this sideways action does let the RSI cool off a bit, allowing another possible run.

I have thought about it deeply and there's just so much potentially huge news right around the corner that I feel great still being loaded up. Taking 10% off around here is prudent money management, but what I want to make clear is, don't sell anymore! The toughest part about investing isn't picking winners, it's knowing when/how to sell and being patient. 90% plus of the time, stocks don't really do much, and that's when we earn our huge profits...by SITTING TIGHT.

ZEN is behaving like it wants to go higher. I would not be surprised if we see $5 next week as, clearly, we now have new institutions taking positions. Once we surpass $5, it opens the door for more institutions to buy it, that have a minimum qualification of $5 per share to get involved in stocks. We have more drill results and possible West core samples/photos coming anytime and a 43-101 just around the corner. There is always risk in a stock (in fact-risk/reward is always inversely correlated...more reward/upside potential-more risk) but I think there's VERY little risk the deposit tonnage or eventual quality of this graphite disappoints the street. In fact, when asked recently if ZEN was "ahead of itself", I said it's more like "catching up". The stock price is catching up to what we've already known/suspected, that the value of the Albany deposit is truly incredible.

If/when we see that this stuff unequivocally will compete in the synthetic markets and service the highest end of the various applications in industries like nuclear and lithium ion batteries, the stock will explode further. I'll stick to my plan of selling another 10% (maybe 20% if it goes way too high way too fast) once we're in the $6-10 range. But after that, I may just hold everything until the company is bought out. It's simply very unlikely that Zen is the one who eventually takes this into production (this is my personal speculation). I believe we have the holy grail and someone is going to want it....bad. I still highly recommend everyone read "The Big Score" by Jacquie McNish, about the Voisey Bay discovery and Diamond Fields, whose stock went from pennies into the hundreds. I'm not saying Zen is going into the hundreds, but the book helped me in letting Zenyatta ride, as I learned to appreciate how history and the markets can reward certain unique discoveries in a massive fashion as the drills turn.

I also have to believe that some bigger investment banks will initiate buy recommendations/coverage soon. I don't even know if any other newsletter writers have come on board yet! Incredible. So, more East drill results, potential continuity confirmation drilling out of the 2x larger West anomaly, 43-101 in September, $5 new institutional buying green light, likely new analyst coverage sooner than later(the stock running this big puts pressure on the guys who have been watching to get something out), and huge momentum. If we pull back from here or not, that's still a nice lineup of potential catalysts in the reasonably near future.

Medallion Resources (MDL/MLLOF) is trading fantastically as well. As suggested, selling started to dry up today after the last settlement date of warrants on Wednesday, and voila....testing 52 week highs into the close. Tomorrow we may see new 52 week highs and I still encourage everyone keep their eye on the ball and be ready to buy more on any pullbacks. The share structure/market capitalization is so small/tight that any real buying could just send this ripping higher. In fact, I don't see any significant resistance until we hit 50 cents and MDL is not over bought, the RSI stands at only 67 and is stagger stepping its way up. The stock is still very cheap on a going-forward fundamental basis.

I'm looking for BIG things to continue to fall into place for Medallion as the year goes on. Also, let's see what the rare earth stocks in general do next week as they have rested from an initial bounce, and it looks to me like the sector might be in the early stages of heating back up.


Happy Trading!


Eric